Greifenberg Digital Aims For U.S. Digital Listing (GDLT)

A Quick Take On Greifenberg Digital Limited

Greifenberg Digital Limited (GDLT) has filed to lift $15 million in a direct itemizing of its widespread shares, based on an F-1 registration assertion.

The agency gives threat analytics companies for fixed-income markets.

Given the agency’s lack of considerable income, skinny capital base and administration’s valuation assumptions, my outlook on the direct itemizing is on Hold.

Overview

New York, NY-based Greifenberg Digital Limited was based to develop proprietary threat fashions for figuring out threat profiles of company borrowing entities in rising fixed-income markets.

Management is headed by Chief Executive Officer David Goldman, who has been with the agency since January 2021 and was beforehand Business Editor for Asia Times and has written a number of books and extensively revealed articles on worldwide matters.

The firm’s protection space by nation or area embrace:

Future:

• South America

• Southeast Asia

• Australia

As of September 30, 2022, Greifenberg has booked truthful market worth funding of $2.1 million from buyers together with Integrated Media Technology Limited, Infa Premium Sdn Bhd and others.

Customer Acquisition

The agency’s enterprise mannequin shall be to promote its analysis reviews as a subscription-based service to ‘market members in fastened earnings merchandise together with business, funding & international banking, governments and regulatory companies, companies, insurance coverage firms, non-public equity, and funding administration companies.’

GDLT intends to focus first on China after which increase its companies to different international locations and areas.

Employee Benefits bills as a share of complete income have fallen as revenues have elevated from a tiny base, because the figures under point out:

Click to enlarge

(Source – SEC)

The Employee Benefits effectivity a number of, outlined as what number of {dollars} of further new income are generated by every greenback of Employee Benefits spend, elevated to 0.3x in the newest reporting interval, as proven within the desk under:

Click to enlarge

(Source – SEC)

Market

According to a 2022 market research report by MarketsAndMarkets, the worldwide market for threat analytics was an estimated $39.3 billion in 2022 and is forecast to achieve $70.5 billion by 2027.

This represents a forecast CAGR of 12.4% from 2023 to 2027.

The primary drivers for this anticipated development are rising necessities for presidency compliance and rising complexities throughout varied markets.

Also, the monetary companies trade is a subset of the overall threat analytics market and hopes to more and more make the most of AI/machine studying applied sciences to enhance analysis of economic devices.

Financial Performance

Below are related monetary outcomes derived from the agency’s registration assertion:

(Source – SEC)

As of September 30, 2022, Greifenberg had $25,467 in money and $640,431 in complete liabilities.

Free money movement in the course of the twelve months ended September 30, 2022, was unfavorable ($112,041).

Direct Listing Details

Greifenberg intends to lift $15 million in gross proceeds from a direct itemizing of its widespread shares, providing 3 million shares at a worth of $5.00 per share, on a ‘best efforts’ foundation and with a $10 million minimal subscription ground.

No current shareholders have indicated an curiosity in buying shares on the itemizing worth.

Assuming a profitable itemizing, the corporate’s enterprise worth would approximate $27 million, excluding the consequences of underwriter over-allotment choices.

The float to excellent shares ratio (excluding underwriter over-allotments) shall be roughly 36.32%. A determine underneath 10% is usually thought-about a ‘low float’ stock which may be topic to vital worth volatility.

Management says it can use the online proceeds from the itemizing as follows:

Continuous improvement and funding in IT know-how for web site and cell App

Growth methods – together with improvement of economic fashions for mutual funds and different gadgets

Development of economic fashions for different rising markets

Sales and advertising and marketing – funding in media, advertising and marketing and promotion

Working capital

(Source – SEC)

Management’s presentation of the corporate’s itemizing isn’t out there.

Regarding excellent authorized proceedings, administration says the agency isn’t presently a celebration to any authorized proceedings that will have a cloth antagonistic impact on its monetary situation or operations.

Valuation Metrics For Greifenberg

Below is a desk of related capitalization and valuation figures for the corporate:

Click to enlarge

(Source – SEC)

Commentary About Greifenberg’s Direct Listing

GDLT is in search of U.S. public capital market funding to develop its know-how and enterprise within the fixed-income threat analytics house.

The agency’s financials present little income historical past and materials losses.

Free money movement for the twelve months ended September 30, 2022, was unfavorable ($112,041).

Employee Benefits bills as a share of complete income have fallen as income has elevated; its Employee Benefits effectivity a number of was 0.3x in the newest reporting interval.

The agency presently plans to pay no dividends on its widespread shares and to retain any future earnings for reinvestment again into the corporate’s development initiatives and working necessities.

The market alternative for offering threat analytics is giant and anticipated to develop considerably within the coming years, though its development trajectory within the agency’s focus space is tough to find out.

There isn’t any ‘underwriter’ for the direct itemizing. As administration writes:

The providing worth of the shares has been decided arbitrarily by us. The worth doesn’t bear any relationship to our belongings, guide worth, earnings, or different established standards for valuing a privately held firm. In figuring out the variety of shares to be supplied and the providing worth, we took into consideration our capital construction and the quantity of money we would want to implement our enterprise plans. Accordingly, the providing worth shouldn’t be thought-about a sign of the particular worth of our Common Shares.

Risks to the corporate’s outlook as a public firm embrace its tiny dimension, skinny capitalization and lack of fabric income historical past.

As for valuation, administration is asking buyers to pay an Enterprise Value/Revenue a number of of roughly 338x, an astronomically excessive a number of.

Given the agency’s lack of considerable income, skinny capital base and administration’s valuation assumptions, my outlook on the direct itemizing is on Hold.

Expected Direct Listing Date: To be introduced.